UPDATE 1-Mexico annual inflation rate climbs to 16-year high in August

Reuters Staff

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(Adds data, background)
MEXICO CITY, Sept 7 (Reuters) - Mexico's annual inflation
rate rose to its highest in 16 years in August, but policymakers
were confident the pace of consumer price gains will begin to
fall soon.
Mexican consumer prices climbed 6.66 percent in the year
through August, the national statistics agency said on Thursday.
That was the highest rate since May 2001. It surpassed the
6.44 percent rate in July and was just above forecasts in a
Reuters poll.
Last month, Mexico's central bank held interest rates at
7.00 percent after hiking them in the previous seven policy
meetings to counter the surge in inflation.
The bank's policymakers have recently said they expect
inflation would soon peak and drop significantly in the first
months of next year.
The annual core inflation rate, which strips out some
volatile food and energy prices, rose to 5.00 percent, the
highest level since mid-2009, slightly below forecasts in the
Reuters poll.
Consumer prices rose 0.49 percent in August,
according to non-seasonally adjusted figures, driven by higher
onion and domestic cooking gas prices. The core index increased
by 0.25 percent during the month .
(Reporting by Michael O'Boyle; Editing by W Simon)